FACTORS AFFECTING BUYING BEHAVIOUR OF CUSTOMERS OF COLD ROLLED STEEL STRIPS/COILS IN LUDHIANA

A Project Report Submitted by

TINA ARORA
Reg. No. 1175207

In partial fulfillment for the award of the degree Of

MASTERS OF BUSINESS ADMINISTRATION

IN MARKETING At
RIMT-INSTITUTE OF MANAGEMENT AND COMPUTER TECNOLOGY,MANDI GOBINDGARH PUNJAB TECHNICAL UNIVERSITY

ACKNOWLEDGEMENT
I take this opportunity to express my profound sense of gratitude & respect to all those who helped me in this Research. I would like to make special mention of help and encouragement that I received from Mr. RAJKUMAR SANDAL & MR.BHUPESH SHARMA, my project Managers which were critical in the development of this project. I have profited immensely from working with many distinguished thinkers and doers, who advised me at each step. I would also like to thank the Marketing Department of nice exports and people in the organization for sparing their valuable time and providing useful insights that have made my learning experience very fruitful.

Above all I want to thanks my parents, for their continuous involvement and constant support. Finally and most important I would like to thank to Faculty of RIMT to provide me with such an opportunity that has enhanced my learning horizon Last but not least, I thank the almighty, may he stand with all of us.

TINA ARORA REG. NO. 1175207 MBA-3RD SEM

PREFACE
I feel delighted to present my project report on FACTORS AFFECTING BUYING BEHAVIOR OF CUSTOMERS OF COLD ROLLED STEEL STRIPS/COILS IN LUDHIANA is a matter of honor and pride for me that I got a chance to undergo my Summer Training in a company like NICE EXPORTS PVT LTD. (CR Division). In this period of six weeks I got familiar to the real conditions of an organization and especially to the work culture of such a big and prestigious group which has its name in the manufacturing of Two Wheelers and many others products as well as Customer services.

The first task for me was to know about the concept on which my project was based. Then I had to set criteria, on the basis of which the above concept was valued. The data was collected for each of the parameter found responsible in influencing the purchase decision of the customers through Marketing Research Program.

Hence, this project had to be completed in the Six weeks of time. As the time was limited, so there is a possibility that some matters might not have been taken into consideration, but every effort has been done from my side to include every necessary parameter and include whole information that I got from the market during surveys as well as the marketing Research Program.

CERTIFICATION
This is to certify that the research project entitled FACTORS AFFECTING BUYING BEHAVIOUR OF CUSTOMERS OF COLD ROLLED STEEL STRIPS/COILS IN LUDHIANA submitted for the partial fulfillment of requirement for the degree of MASTERS OF BUSINESS ADMINISTRATION at , RIMT MANDI GOBINDGARH affiliated to PUNJAB TECHNICAL UNIVERSITY, JALANDHAR is a bonafide research work carried out by TINA ARORA of M.B.A under my supervision and that no part of this has been submitted for any degree.

The assistance and help received during the course of the investigation have been fully acknowledged. TINA ARORA

DECLARATION
I hereby declare that the project titled FACTORS AFFECTING BUYING BEHAVIOUR OF CUSTOMERS OF COLD ROLLED STEEL STRIPS/COILS IN LUDHIANA is an original piece of research work carried out by me.

The information has been collected from genuine & authentic sources. The work has been submitted in partial fulfillment of the requirement of Master of Business Administration to RIMT COLLEGE OF MANAGEMENT affiliated to Punjab technical university.

Place: Date:

Signature: TINA ARORA M.B.A. 3RD SEM

EXECUTIVE SUMMARY

In the age of fast changing Marketing strategies, customer behavior, new market segments and product opportunities along with sensitivity to changing customer needs, the NICE group develops and adapts marketing strategy and philosophy. As the NICE EXPORTS group is known for its completely customer- driven approach. For that very reason NICE EXPORTS CRD undergoes this project.

The main aim of the project is to know the purchase criteria / Buying Behavior of customers of the Cold Rolled Steel Strips/ Sheets provided by the NICE EXPORTS C.R. Division and used in various industries ( Bicycle ND PARTSetc.) in Ludhiana.

The customers perceive Quality as the most important factor while purchasing. More customers will be attracted towards the products if quality parameters such as surface finish, peeling off etc. are improved upon by getting continuous feedback on the quality and other services provided by the company. The second most important factor is delivery system and price. The price should be competitive with the other suppliers. The third most important factor is Credit policy of the company. Better credit facility should be given to the customers and payment norms should be simplified. Quality should be used to cover the price. Improvement in quality, Services, Delivery and Rate reduction should be made to further increase the market share and to attract the new customers of C.R. Steel Strips/ Sheets.

CONTENTS
CHAPTERS CHAPTER-1 INTRODUCTION OF THE PREOJECT REVIEW OF LITERATURE OBJECTIVE OF STUDY SCOPE OF STUDY CHAPTER-2 COMPANY PROFILE CHAPTER-3 RESEARCH METHODOLOGY UNIVERSE OF STUDY SAMPLING TECHNIQUES PERIOD OF STUDY LIMITATIONS OF STUDY SCOPE FOR FURTHER STUDY CHAPTER-4 ANALYSIS OF TOPIC CONCLUSIONS INFERENCES SUGGESTIONS & RECOMMENDATIONS CHAPTER-5 BIBLIOGRAPHY QUESTIONNAIRE

CHAPTER-1

INTRODUCTION TO THE PROJECT

The project was given to me to study the FACTORS AFFECTING BUYING BEHAVIOR OF CUSTOMERS OF COLD ROLLED STEEL STRIPS/COILS IN LUDHIANA. So, the area of operation for me was the MARKETING

DEPARTMENT of the organization. The first task for me was to know about the concept on which my project was based. Then I had to set criteria, on the basis of which the above concept was valued. The data was collected for each of the parameter found responsible in influencing the buying behavior of the customers though Marketing Research Program.

INTRODUCTION TO CONSUMER BEHAVIOUR

The Business market is comprised of organizations that in some form are involved in the manufacturing, distribution or support of products or services sold or otherwise provided to other organizations. The amount of purchasing undertaken in the business market easily dwarfs the total spending by consumers. Because the business market is so large, it draws the interest of millions of companies worldwide that market exclusively to business customers. For these marketers understanding how businesses make purchase decision is critical to their organizations marketing efforts. In some ways understanding the business market is not as complicated as understanding the consumer market. For example, in certain business market, purchase decision hinge on the outcome of a bidding process between competitors offering similar products and services. Thus unlike consumer markets, where building a recognizable brand is very important, for many purchase situations in the business market this not the case.

However, in many other ways business buying is much more complicated. For instance, the demand by business for products and services is affected by consumer purchases (called derived demand) and because so many organizations may have a part in creating consumer purchases, a small swing in consumer demand can create big changes in business purchasing. Automobile purchases are a good example. If consumer demand for cars increases many companies connected with the automobile industry will also see demand for their product and services increase. Under these condition companies will ratchet up their operations to ensure demand is met, which invariably will lead to new purchases by a large number of companies. In fact, it is conceivable that an increase of just one or two percent for consumer demand can increase business demand for products and services by five or more percent. Unfortunately, the opposite is true if demand declines. Trying to predict these swings requires businesses to not only understand their immediate customers but also the end user, which as we will discuss, may be will down the supply chain from where the business operates.

WHO MAKES UP THE BUSINESS MARKET?

There are millions of organizations worldwide selling their products and services to other organizations. They operate in many industries and range in size from huge multinational companies with thousands of employees to one-person small businesses. With such a large number of originations and industries contained within the business market, a marketer can obtain a better picture of who is involved by looking at popular business classification systems set up by international governments, such as the North American Industrial Classification system (NAICS), which covers Canada, Mexico and the United States and the International Standard Industrial Classifications (ISIC), which is widely used in Europe. These reports provide descriptions of hundreds of industry classification.

Supply Chain Members

The supply chain consists of mostly for-profit companies engaged in activities involving product creation and delivery. Essentially the chain represents major steps needed to manufacture a product that will eventually be sold as a final product. Each member of the supply chain purchases products and services enabling them to carry out its business objectives. When making purchase decisions supply chain members may be motivated by such factors as: Product cost Return on investment Assurance of consistent supply Reciprocity with supplying firm

An example of purchasing occurring in the supply chain includes: Manufacturing and Plant equipment Information Technology Offices Supplies Professional Business Services, etc.

Business User Markets

Besides selling final products and services to supply chain companies, several additional User markets also make purchases either for their own consumption or they buy with the intention of redistributing to others. In these purchase situations the buyer generally does not radically change the product from its from when it was purchased from a products manufacture.

BUSINESS MARKET V/S CONSUMER MARKET?

For marketers, the selling environment of business markets present uniquely different circumstances when compared to selling to consumers. At the beginning of this tutorial we saw two ways in which consumer and business markets differ: 1) Business markets are more likely to be price driven than brand driven, and 2) Demand in business markets tend to be more volatile than consumer markets. However, the two markets are dissimilar in other ways requiring marketers to take a different approach when selling to business customers than to consumers. These differences include:

How decisions are made. Existence of experienced purchasers. Time needed to make buying decision. Size of purchases. Number of buyers.
Type of promotional effort needed to reach buyer.

How Decision Are Made

In the consumer market a very large percentage of purchase decisions are made by a single person. There are situations in which multiple people may be involved in a consumer purchase decision, such as a child influencing a parent to choose a certain brand of cereal or a husband and wife deciding together to buy a house, but most of the time purchases are individual decisions. The business market is significantly different. While single person purchasing is not unusual, especially within a small company, a significant percentage of business buying, especially within larger organizations, requires of many. In the marketing literature those associated with the purchase decision are known to be part of a Buying Centre, which consists of individuals within an organization that perform one or more of the following roles:

 Buyer Buyer is responsible for dealing with suppliers and placing orders (e.g.,
purchasing Agent).

Decider Decider has the power to make the final purchase decision. (e.g.,
C.E.O).

Influencer has the ability to affect what is ordered such as setting order
specifications (e.g., engineers, researchers, product manager).

User - those who will actually use the product when it is received (e.g., office
staff etc).

Initiator any buying centre member who is the first to determine that a need
exist.

Gatekeeper anyone who controls access to other Buying Center members

(e.g., administrative assistant).

Experienced purchasers
As noted in the discussion of the buying center, organizations often employ purchasing agents or professional buyers whose job is to negotiate the best deals for their company. Unlike consumers, who often lack information when making purchase decisions, professional buyers are generally as knowledgeable about the product and industry as the marketer who is selling to them.

Decision Making Time

Depending on the product, business purchase decisions can drag on for an extensive period. Unlike consumer markets where impulse purchasing is rampant, the number of people involved in business purchase decisions results in decisions taking weeks, months, or even years.

Larger purchases
For products that are regularly used and frequently purchased, businesses will often buy a larger volume at one time compared to consumer purchases. Because of this business purchasers often demand price breaks (e.g., discounts) for higher order levels.

Number of Buyers
While there are several million companies worldwide that operate in the overall business market, within a particular market the number is much smaller. For example, while in the United States there are 95 million households who may shop at a grocery store, there are only a few thousands grocery stores with many of these centrally controlled as part of a chain of stores. Additionally, within some industries buyers are highly concentrated in certain geographic areas. Consequently, compared to consumer products, marketing efforts are confined to a smaller targeted group.

Promotional Focus
Companies who primarily target consumers often use mass advertising methods to reach an often widely dispersed market. For business-to- business marketers the size of individual orders, along with a smaller number of buyers, makes P2P contact by sales representatives a more effective means of promotion.

BUSINESS BUYING BEHAVIOR

To cap our discussion of the business market we now look at how purchasing decisions are made. Business purchasing follows the same five-step buying process faced by consumers:

1. Need Recognition 2. Search 3. Evaluate Options 4. Purchase 5. After Purchase Evaluation.

OBEJECTIVES OF RESEARCH
Primary Objective:
To study the purchase criteria of the customers and identify the factors that influence the Customer Buying Behavior in respect of Cold Rolled Steel Strips/Sheets provided by the NICE EXPORTS(C.R. Division) used in various industries (Bicycle) in Ludhiana.

Secondary Objectives:
1. To find the major Specifications and Grades of Cold Rolled Steel Strips/ Sheets used in various type of industries in Ludhiana.

2. To find out the requirements of various types of industries in Ludhiana in which cold Rolled (C.R) steel strips/ sheets are used as a raw material.

3. To find out the market share of the NICE EXPORTS CR Division in Ludhiana Region.

4. To know about the future expansion plans of various organizations & ascertain their increased buying from NICE EXPORTS CR Division.

CHAPTER-2

NICE EXPORTS PROFILE

NICE EXPORTS- A name synonymous with the two wheelers,CYCLE PARTS in India began its journey around four decades ago. Like every success story, Heros saga contains an element of spirit and enterprise; of achievement through grit and determination, coupled with vision and meticulous planning. The NICE EXPORTS began with a simple philosophy: To provide excellent transportation to the common man, at a price he could easily afford. It is this spirit which drives even today the dream of providing total satisfaction in all its spheres of activities.

Starting as manufacturer of bicycle components, NICE has today grown into multi-unit, multi-product, geographically diversified, manufacturing companies for bicycles, cycles,

cold rolled steels and components. Group Turnover is Rs. 20000 Crore in 2007-2008 of which EXPORT share is more than 15%. The exports are being made to all parts of the world including sophisticated markets of Europe & US. Today NICE is the largest exporter of two-wheelers in India, besides being the fastest growing Indian Two-wheeler Company.

IT has increased its market share from 54% to 58 %.

The group has redefined the concept of ANCILLIARISATION by extending technical & managerial support to the ancillaries.. With a deep sense of belonging to the nice

fraternity, the Groups dealers have catalyzed growth and act as a strong bridge between the customers and the group. More than 20,000 employees of the group have vividly and continuously demonstrated that human endeavor can ceaselessly achieve excellence and distinction given a congenial and conducive environment. This has been amply testified in very low employee turnover and world-class productivity. The flag ship company of the group NICE EXPORTS LIMITED has been practicing JUST-IN-TIME (JIT) INVENTORY since the period when the term was not widely known. The practice is prevalent in all the group companies. The group Chairman Mr. SANJEEV GUPTA, is one of the leading business personalities among the businessmans.. He was awarded Businessman of the year award in 2005 by a leading business journal of India. With the expertise available in-house the group has mustered to implement SAP in other Companies on its own.

COMPANY PROFILE
Hero Cycles Limited (Cold Rolling Division) has been promoted under backward integration plan by Hero Cycles Limited, the worlds largest bicycle manufacturer. The plant was commissioned in July, 1991 at Ludhiana at a cost of Rs. 320 million with an installed capacity of 50,000 MT in consultation with MECON, Asias largest engineering consultants which had a technical collaboration with WEAN UNITED, U.S.A. An additional 6-HI COLD REDUCTION MILL based on a joint Engineering & design by MECON & Hero Cycle Ltd. along with hydrogen annealing and Electro cleaning line has been installed for better product quality and capacity enhancement to 1,30,000 TPA with an additional investment of Rs. 700 million. The plant was commissioned primarily to cater to the group requirements. However the product was soon accepted by major automotive and White Goods manufacturers and today has been supplied to other market segment also, e.g. automobile sector, Maruti Udyog Limited ancillaries/vendors for both formed and drawn components -in D. DD, EDD, MC-11 and other medium and high carbon grades. Towards realization of CUSTOMER DELIGHT, the plant has been investing constantly in up gradation of Technology and Human Resources. Cold Rolling Division is renowned for its tradition in maintaining high standards in the Product Quality constantly, Reliability in customer servicing and is also committed to attune to the changing quality standards through continuous up gradation of Product, Process and Human Resources. At the base of all Hero Groups activities is one basic ingredient - cold rolled steel. Cognizant of the importance to ensure perfect quality of the basic raw material, the Group established its own cold rolling mill for steel processing in 1990. With an installed capacity of 50,000 MT per annum, the mill has state-of-art equipment including 4-HI reversible cold rolling-cum-skin pass mill with rewinding line, C. R. Slitter, and a modern close annealing facility to maximize the quality of its products.

The mill has several firsts to its credit, including hydraulic auto gauge controls, computerized pass schedules, automatic slow down and a totally enclosed, semi continuous pickling line; apart from effective anti-pollution and safety controls which were incorporated from the very beginning. The company has also implemented SAP R/3 with the assistance of SIEMENS & MECON. Hero Cycles Limited, C. R. Division has also entered into an agreement for technical assistance to improve operation & maintenance of the plant with the help of technology & know how from Kawasaki Steel Corporation, Japan. Kawasaki Steel Corporation will help C. R. Division for improvement of Production Yield, removal of Defects, reduction of Customer Returns & improvement of Maintenance Operations against certain predetermined Targets. Kawasaki Steel possesses expertise based on the wealth & experience and expertise acquired through development, operation & maintenance of its own Cold Rolling Plant in Chiba and Mizushima Works, Japan. Primarily Cold Rolling is done for two purposes:

1) To improve the surface finish of the steel.

2) To improve the gauge accuracy.

THE QUALITY POLICY OF THE COMPANY

TO MEET THE CUSTOMER NEEDS, EXPRESSED AND IMPLIED BY MAINTAINING CONSISTENCY IN QUALITY THROUGH CONTINUOUS UPGRADATION OF TECHNOLOGY AND HUMAN ENDEAVOR FOR MAXIMIZING THE RETURN ON INVESTMENT TO THE STAKE HOLDERS

SWOT ANALYSIS OF NICE EXPORT

SWOT ANALYSIS
STRENGTHS
MANAGEMENT WITH VISION GOOD CORPORATE IMAGE LOCATION ADVANTAGE STRONG BRAND IMAGE MATERIAL QUALITY SATISFACTORY GOOD CUSTOMER BASE CAPTIVE CONSUMPTION 6 HI MILL WITH ADVANCED CAPABILITIES HYDROGEN ANNEALED FURNACE FOR BETTER FINISH SAP/ERP IMPLIMENTATION CAN PRODUCE SPECIAL GRADE MATERIAL INFRASTRUCTURAL FACILITIES FOR NORTHERN REGION

WEAKNESSES
INABILITY TO ACCOMMODATE CUSTOMERS IN URGENCIES INTER/ INTRA DEPARMENTAL COMMUNICATIONS NOT EFFECTIVE RECCURANCE OF SIMILAR PROBLEM INEFFECTIVE IMPLEMENTATION OF CORRECTIVE MEASURES DELAY & DAMAGES DURING TRANSPORTATION NEW DEVELOPMENTS, PERPETUAL DELAY UNPROFITABLE PRODUCT MIX NARROW WIDTH LIMITATION IN 760 MM PERCIEVED HIGH PRICE OF PRODUCT DELAY IN DELIVERY LESS CREDIT PERIOD

OPPORTUNITIES
GROWTH IN AUTO/ WHITE GOODS SEGMENTS GROWTH N ECONOMY WILL PULL THE DEMAND DIRECT/ INDIRECT EXPORT OPPORTUNITIES TO INCREASE THE
MARKET

FORWARD INTEGRATION IN PRESS MENTAL COMPONENTS/ TUBES/

COATED/ WIDER WIDTH

BACKWARD INTEGRATION LIKE TIE UP WITH SOME HR PRODUCER QUALITY SHOULD BE USED TO COVER THE PRICE BY SUPPLYING RIGHT QUANITY AT TIME , SATISFACTION OF THE
CUSTOMER CAN BE INCREASD

THE COMPANY CAN INCRESE ITS MARKET SHARE BY INCRESING ITS

PRODUCTION CAPCITY

INCREASE MARKET SEGMENTS TO CATER AND TO INCREASE

CUSTOMER BASE

THREATS
HUGE IDLE & ADDITIONAL CAPACITY IN EXPANSIONS IN NEW MILL.

SHIFT OF CR MARKET TO HR, HR OILED AND PICKLED MARKET.

EXISTENCE OF COMPETITION WILL CUT DOWN PROFITS

REGIONALISATION DUE TO HIGH TRANSPORTATION COSTS.

DECIMATION OF DD/ EDD GRADES.

USAGE PATTERN CHANGING FROM CR TO GALVANIZED, COLOUR

. COATED STEEL

MAJOR COMPITITORS OF HERO ARE IMPROVING THEIR QUALITY

AND DELIVERY

SMALLER SUPPLIER ARE INCREASING THEIR CREDIT PERIOD

THE POLICIES OF THE COMPETITORS ARE FLEXIBLE AS COMPARED

TO HERO CYCLES CR DIVISON

PROCESS ROUTE
Before the execution of a production orders the details of process route and product specifications are sent to the shop floor in the form of a small rectangular card. This card accompanies the coil through out its process life. The different work centers in HERO CYCLES Ltd. C.R. Division are:

1).

HR (Hot Rolled) SLITTER

The HR Coil is first sent to the HR Slitter, where it can be slit in maximum 4 widths. The widths are decided based on factors like minimization of slit loss, order priority etc. This activity is being done manually at present by PRODUCTION PLANNING & CONTROL department, but the optimization package being developed by MECON will calculate this, and suggest the most optimum-slitting pattern for the HR Coil. A 4 digit unique code is assigned to the HR Coil, and a suffix of A, B, C and D is added to this number after the coil is slatted. This identity of slatted coil is maintained till it reaches the CR slitting stage. The Pull through HR slitting line cuts the rough edges of the HR coils, slitting it into narrower widths. The HR Slitter has a production capacity of 20 tonnes/hr.

2).

PICKLING

After the HR slitting, the coil goes through the process of pickling that the coil is sent through various chambers containing acids, which removes the surface impurities. The pickling line uses three acid tanks and three rinse tanks. After the pickling operation, the coil is sent for cold rolling. As it was mentioned above, the route, which the coil has to take, is predetermined, and is displayed, on a card, which accompanies the coil. It offers the following Advantages: Removes ferrous scales from the surface of the HR Coils. Minimum carryover of chloride. Minimal setup, hence more adaptable to quick changeovers. A hot air blower at the end dries off the excess water on the strip.

3).

ROLLING

Rolling can be done either in 6Hi mill or in 4Hi mill depending upon the desired thickness, and available capacity. The rolled coils have to be rewound to decrease the tension. This can be done either on 2Hi, 4Hi or 6Hi mill. Rolling also leads to increased hardness, which makes the coils brittle. The 6-Hi mill has automatic gauge control, pass schedule storage and auto intermediate slow down. The mills give flat strip shape, minimized edge drops and thinner gauges.

4).

ANNEALING

Annealing is a process of Heating, Soaking and Controlled cooling of a Coil in a nonoxidizing atmosphere. This process renders the strip soft and restores the ductility and formability. There are two types of annealing: HYDROGEN ANNEALING. NITROGEN ANNEALING.

5). SKIN PASS

After Annealing the coil is sent for skin pass. This Process imparts a surface finish for e.g. matte, mirror etc. to the coil, depending on the customer requirements. This process can be carried out on all 3 rolling mills. It offers the following Advantages: Skin Passing removes stretcher strain or Luder Lines. It provides desired finishes such as Matt, Bright on the strip surface. Imparts flatness to the strip.

6).

CR(Cold Rolled) SLITTER

After the skin pass the coil is sent to CR slitting machines. The slit coils are again allotted a new number, and the previous identity is lost after this process. Other considerations here are the inner and outer diameter and number of coils.

7). CUT TO LENGTH

If the customer requires strips as final goods then the coils are sent to Cut to Length (CTL) machines which cut the coil in the desired length of the strips.The length can vary from 400mm to 3500mm.

8).

PACKING

The final process is packing of coils and strips, and subsequent dispatch. This is the complete description of the process route. It is not necessary for the coil to go through all the processes mentioned. Depending on the type of product and customers requirement some of these processes can be skipped or repeated.

PRODUCT APPLICATIONS
Cold rolled steel strips are manufactured by C.R. Division to meet a variety of uses. Some of the common applications are detailed below:Automobiles & Auto Components. Bicycle and bicycle components. Pipes and Tubes. Refrigerators. Furniture. Shutters. Bearings. Cable tape. Transformers and Radiators. Electric steel (Laminations, TV chassis, picture tube frames, meters, switch gears). Domestic appliances (Washing machines, fans, stoves, sewing machines, ovens, toasters, grills etc) Office automation products (Computer components, typewriters, Photostat machine components etc)

MAJOR CUSTOMERS OF NICE EXPORTS CR DIVISION

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. MARUTI UDYOG LIMITED ESCORTS LIMITED (MSD) ESCORTS LIMITED (TRACTOR DIVISION) ESCORTS LIMITED (YAMAHA MOTOR CYCLES DIVISION) HERO HONDA MOTORS LIMITED TECHNICO IINDUSTRIES (P) LIMITED GABRIEL INDIA LIMITED GODREJ GE APPLIANCES LIMITED MANDAP INTERNATIONAL LIMITED HERO CYCLES LIMITED LOHIA MACHINES LIMITED MOONLIGHT AUTO (P) LIMITED BHURJEE MACHINE TOOLS SHEET COMPONENTS/PIONEER AUTO (KAY JAY) HAWKINS COOKERS LIMITED RAIL COACH FACTORY, KAPURTHALA INDO ASIAN FUSEGARS LIMITED PGT COMPONENTS LIMITED AGRO ENGINEERING WORKS/ASIAD ENGINEERS HORIZON INDUSTRIES PRODUCTS JAY YUSHIN LIMITED DHANJAL ENGINEERING LIMITED MULTITECH PRODUCTS MITASO APPLIANCES LIMITED

25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39.

PERFECT WHEELS SETHI INDISTRIAL CORPORATION R.R. AUTOMOTIVE COMPONENTS SDL AUTO PVT. LTD. (FOR CAR SEAT COMPONENTS) JBM TOOLS LIMITED SHIVANI LOCKS (P) LIMITED VENUS METALS/VENUS STAMPINGS VICTORA TOOLS OMAX ENGINEERS EMM KAY INDUSTRIES INTERNATIONAL ELECTRONIC DEVICES LIMITED (IEDL) STEEL TUBES OF INDIA LIMITED AUTO TECH AUTO MAX (UNIT OF OMAX AUTO LIMITED) HIMACHAL FASTENERS LIMITED (VENDORS FOR PUROLATOR)

40. 41. 42. 43. 44. 45. 46. 47. 48.

NATIONAL ENGINEERING INDUSTRIES LIMITED BPL (INDIA) LTD. ELECTROLUX INDIA LIMITED TECUMSEH PRODUCTS INDIA LIMITED BAJAJ TEMPO LIMITED BAJAJ AUTO (ANCILLARIES) INDICA (ANCILLARIES) TECH AUTO LIMITED DAEWOO MOTORS LIMITED (ANCILLARIES)

CHAPTER-3

RESEARCH METHODOLOGY
The Research Design is the basic framework, which provides the basic guidelines for the Research process. It is a blue print according to which research is to be conducted. For carrying out my research work, I carried out survey and respondents were contacted at their places. The primary data is collected with the help of Questionnaire.

Survey Method:
The Survey Method was selected to obtain the needed information by asking the questions to the respondents through the Questionnaire developed, and passed by our HOD Marketing. As per Marketing Department this method was the suitable for the project. Surveys are generally conducted both in qualitative and quantitative researches. After decision about the sampling, the questionnaire was designed and the respondents were contacted to answer the question. This process of getting answer is known as interviewing.

Two significant factors affect the effectiveness of survey methods are:

1. Wording of questionnaire (It must be such that it extract desired information accurately and unbiased.) 2. Ability and willingness of the respondent to give accurate and unbiased information.

Method Used in conducting survey:

Personal Interview:
Personal interview is the process of communication where face to face contact between the investigator and the respondent is established. It is the conversation arranged for the purpose of obtaining views of the respondent on the topic of interest to the interviewer. Under this method the investigator presents the questionnaire in person at office of the respondent. Being active participant, he establishes a close rapport with the respondent and motivates him or her to answer all the question satisfactory.

Samples:
Since I have to make a survey of various type of industries in Ludhiana which are using Cold Rolled (C.R.) Steel Strips/Sheets, thus I have taken a proper sample in proportion of various industries giving due weight age to number of various type of industries using C.R.Steel Strips/Sheets in Ludhiana.

NUMBER OF AUTOMOBILE INDUSTRY = 27

NUMBER OF BICYCLE INDUSTRY = 21

NUMBER OF OTHER INDUSTRY = 12

SUGGESTIONS & RECOMMENDATIONS

The customers of CR Steel Strips/Coils perceive quality as the most important factor while purchasing. More customers will be attracted towards the products if quality parameters such as surface finish, peeling off etc. are improved upon by getting continuous feedback on the quality and other services provided by the company. The second most important factor is delivery system and price. The price should be competitive with the other suppliers. The third most important factor is Credit policy of the company. Better credit facility should be given to the customers and payment norms should be simplified. Quality should be used to cover the price. Improvement in quality, Services, Delivery and Rate reduction should be made to further increase the market share and to attract the new customers of C.R. Steel Strips/ Sheets. There are some Suggestions, which should be considered in the future for better customer satisfaction. These are: Prices should be competitive.

Delivery should be on time as per Quantity scheduled.

Lifting of Material should quickly after the sale for better customer satisfaction

Better credit facility should be given to the customers

In future to attract the new customers Discount should be given.

Communication channels should be improved for providing the maximum

satisfaction.

LIMITATIONS OF STUDY
Presence of Human Error: - Some respondents have not given the proper

answers, they are not aware of the objectives undertaken for research purposes.

Time Constraint: - Time has also affected the research due to less availability of

number of days; survey was conducted in few days.

Technical Complexities: - There was no proper record maintained by the

customers about the consumption of C.R. Steel Strips/ Sheets.

Non Co-operation of some Respondents: - Some Respondents did not properly

co-operated for giving answers, the basic reason was non-availability of time.

Respondent Biasness: - Some companies were very much favor in one company

but they were unable to provide logic behind it.

CHAPTER-3

Ques1. What type of products do you manufacture?

TYPE OF PRODUTS Automobile parts Bicycle parts Others

%AGE OF RESPONDENTS 45% 35% 20%

NO. OF RESPONDENTS 27 21 12

Others 20%

Bicycle parts 35%

Automobile parts 45%

INFERENCE
The graph represents that 45% of the industries that use cold rolled steel in Ludhiana are manufacturing automobile parts, 35% of the industries manufacturing bicycle parts & rest of them i.e. 20% industries are manufacturing Stampings, Radiators, White Goods etc.

Ques2. What is your status in supply chain?

STATUS IN SUPPLY CHAIN 1st tier 2nd tier 3rd tier

%AGE OF RESPONDENTS 50% 23.33% 26.67%

NO. OF RESPONDENTS 30 14 16

1 tier

2 tier

3 tier

27%

23% 50%

INFERENCE
The major amount of industries using cold rolled steel (50%) in Ludhiana comes in 1st tier means they are direct vendors of the industries like Nice exports,Hero cycles, Hero Honda Motors Limited, Maruti Udyog Limited etc.The 23.33% of industries comes in 2nd tier that are vendors of 1st tier industries & 26.67 % industries comes in 3rd tier that are vendors of 2nd tier industries.

STATUS IN SUPPLY CHAIN 1st tier 2nd tier 3rd tier

AUTO INDUSTRY 19 6 2

BICYCLE INDUSTRY 8 5 8

OTHER INDUSTRIES 3 3 6

20 18 16 14 12

19

AUTO 10 8 8 6 6 4 2 0 1st TIER 2nd TIER 3rd TIER 3 5 3 2 6 8 BICYCLE OTHERS

INFERENCE
The graph indicates the distribution of various industries under different levels of supply chain. This analysis will be further helpful in analyzing the impact of market fluctuations among various industries.

Ques3. Do fluctuations in market affect your buying behavior?

OPTION Yes No

%AGE OF RESPONDENTS 60% 40%

NO. OF RESPONDENTS 36 24

NO 40%

YES 60%

INFERENCE
Out of the total number of respondents 40% of the respondents said that market fluctuations do not affect their buying behavior while remaining 60% industries are affected by fluctuations in market. This shows that if there are market fluctuations, then there is a change in buying behavior i.e. while making purchase, the factors normally kept in mind are ignored & some other factors are considered keeping in view the prevailing circumstances.

1ST TIER
100% 80% 60% 40% 20% 0% AUTO BICYCLE OTHERS NO YES 100% 80% 60% 40% 20% 0%

2ND TIER

NO YES

AUTO BICYCLE OTHERS

3RD TIER
100% 80% 60% 40% 20% 0% AUTO BICYCLE OTHERS NO YES

INFERENCE
The above graphs show the effect of fluctuations in market on various industries classified according to their status in supply chain. Through these we can infer that most of the industries in 1st tier are not very much affected by market fluctuations while 2nd tier industries are less affected by the same. 3rd tier industries are the most affected ones when market fluctuations take place.

Ques4. In which form do you buy steel?

FORM OF CR STEEL CR Coils CR Strips BOTH

%AGE OF RESPONDENTS 25% 15% 60%

NO. OF RESPONDENTS 15 9 36

CR COILS 25%

BOTH 60%

CR STRIPS 15%

INFERENCE
The graph shows that most of the companies use both CR steel strips as well as coils in their manufacturing operations. CR strips are purchased by very less number of companies I.e. most of those which do not have their own CTL (Cut to Length) machines. So they specify their strip sizes according to their product requirements.

Ques5. Which grade(s) of steel do you purchase? GRADE D DD/EDD MC-11,12 OTHERS PERCENTAGE 44 36 15 5

GRADE

15

5 44 D DD/EDD MC-11,12 OTHERS

36

INFERENCE
The percentage share of D (Drawing) Grade steel is much higher because it is the main material grade used in manufacturing of bicycles & Large amount of D Grade steel is consumed . Moreover D grade steel is cheaper than other grades as it has lesser carbon content. Other higher grade steels like DD, EDD, MC-11, 12, IF etc are used in manufacturing other components that require more strength like auto parts, stampings, white goods etc.

Ques7. Which factors do you consider the most while purchasing CR steel? (Rank 1 5 in order of preference) ATTRIBUTES
AUTO INDUSTRY

AVERAGE RANKING
BICYCLE INDU. OTHERS

PRICE QUALITY DELIVERY TIME CREDIT PERIOD AFTER SALES SERVICE

2.33 1.89 2.11 4.44 4.22

1.57 2.29 2.86 4.01 4.28

3.25 3.01 2.99 2.98 2.77

AUTO IND.
5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 4.44 4.22

2.33 1.89

2.11

AUTO IND.

PRICE

QUALITY

DELIVERY TIME

CREDIT PERIOD

AFTER SALES SERVICES

INFERENCE
As the graph represents that most of the customers in Auto industry prefer Quality as the major factor while making purchase decision. Delivery time is another factor influencing their buying behavior followed by price and after sales service. It can be seen that in auto industry credit period allowed by the seller is given the lowest rank. This does not mean that this factor is not taken under consideration but it suggests that keeping in view the other factors, this attribute is given the lowest preference.

BICYCLE IND.
5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 4.01 2.86 2.29 1.57 BICYCLE IND. 4.28

PRICE

QUALITY

DELIVERY TIME

CREDIT PERIOD

AFTER SALES SERVICES

INFERENCE
It can be seen very clearly that in bicycle industry highest preference is given to Price as an attribute while making purchase. The other factor influencing choice of buyers is quality followed by delivery time, credit period allowed & least preference is given to after sales service.

OTHER IND.
5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 3.25

3.01

2.99

2.98

2.77 OTHER IND.

PRICE

QUALITY

DELIVERY TIME

CREDIT PERIOD

AFTER SALES SERVICES

INFERENCE
As the graph indicates that in other industries, after sales service & credit period allowed by sellers are major factors that influence the minds of customers while making purchase decision. Other factors are also closely held with all these attributes.

Ques8. From which supplier(s) you are buying presently?

% AGE MARKET SHARE

HERO CRD

5
10

10
BHUSHAN STEELS

45

AVON CYCLES ATLAS STRIPS OTHERS

30

INFERENCE
A major chunk of Ludhiana CR steel users purchase CR steel from NICE AND HERO CR Division. As per the graph Bhushan Steels is a major competitor with almost 30% of total sales. Followed by Avon Group, Atlas strips, TATA, SAIL, etc.

Ques9. Do you have any expansion plans in near future?

PERCENTAGE

20

YES NO

80

INFERENCE
As we know that bicycle as well as auto industry is expanding rapidly, so most of the organizations have expansion plans to cater to the increasing future market demand. 80% of the companies said that they have expansion plans in near future i.e. within a period of 1-2 years. The capacity is expected to increase by approx. 30%. This means that the future of CR Steel industry is very bright.

Ques11. What are the major quality related problems that you face while purchasing CR steel?

Quality Related Problems Over Width Camber Rusting Thickness Lamination Grain opening Pitted No Problem

Percentage 6 7 19 8 11 4 5 40

Sales
OVER WIDTH 6 7 40 19 THICKNESS LAMINATION 8 5 4 11 GRAIN OPENING PITTED NO PROBLEM CAMBER RUSTING

INFERENCE
The above graph shows the major quality related problems as faced by customers. Most of the customers do not face any kind of quality related problem. If at all, problems like rusting, steel being pitted, improper lamination, inappropriate thickness etc are faced by the customers. If encountered frequently, the customer may reduce the amount of purchasing from that particular seller and may shift to some other source.

Rating of NICE EXPORTS CR DIVISION IN TERMS OF FOLLOWING PARAMETERS a. Company image b. Delivery c. Conformance with specifications d. After sales services e. Response time f. Accommodation of urgencies

ATTRIBUTES

PERCENTAGE RATING

COMPANY IMAGE

81.66

DELIVERY CONFORMANCE WITH SPECIFICATIONS AFTER SALES SERVICES

52.66

91.66

71

RESPONSE TIME

40

ACCOMMODATION OF URGENCIES

65

PERCENTAGE RATING
100 90 80 70 60 50 40 30 20 10 0

81.66 52.66

91.66

71 40

65

PERCENTAGE RATING

INFERENCE
The graph indicates that NICE EXPORTS CRD enjoys a very good image from the customers point of view. More than 80% customers believe that NICE EXPORTS CRD is a well known and reputed company. This is a major factor considered while major factor that customers consider while making their purchase decisions. Delivery does not get much rating essentially due to recession as there has been a shortage of raw material in the market since couple of months. It was seen that the customers shifted to other suppliers owing to poor delivery by NICE EXPORTS CRD. The company gets high rating in conformance with specifications i.e. delivering the material having exactly same chemical as well as mechanical properties as specified by the customers. The company was given average rating in terms of after sales service i.e. it is neither too good nor too bad. The company is very poor in giving proper response to customers grievances. This factor may affect the company in a bad way.

As the graph shows, NICE EXPORTS CRD is quite good in accommodating urgencies as posed by the customers.

QUESTIONNAIRE
Company name: ______________________________________________ Contact person: ______________________________________________ Address : ______________________________________________ ______________________________________________

Ques1. What type of products do you manufacture? a. Automobile parts b. Bicycle parts c. Others

Ques2. What is your status in supply chain? a. 1 tier b. 2 tier c. 3 tier

Ques3. Do fluctuations in market affect your buying behavior? a. Yes b. No

Ques4. In which form do you buy steel? a. CR Coil b. CTL (Cut To Length)

Ques5. Which grade(s) of steel do you purchase? a. D d. MC-11 b. DD e. MC-12 c. EDD f. IF

Ques6. What is your monthly requirement of CR steel grade wise? a. D _____________________________ MT

b. DD/EDD _____________________________ MT

c. MC-11/12 _____________________________ MT d. Others _____________________________ MT

Ques7. Which factors do you consider the most while purchasing CR steel? (Rank 1 5 in order of preference) a. Price b. Quality c. Lead time d. Credit facility e. After sales services

Ques8. From which supplier(s) you are buying presently? Please specify the quantity also. a. ___________________________Qty __________ MT b. ___________________________Qty __________ MT c. ___________________________Qty __________ MT

Ques9. Do you have any expansion plans in near future & what will be your increased capacity? a. Yes b. No

____________________________________MT (approx.)

Ques10. What quantity of your increased capacity of CR steel will you purchase from NICE EXPORTS Ltd (CR Division)? ____________________________________ MT (approx.)

Ques11. What are the problems that you face while purchasing CR steel? a. ______________________________________________ b. ______________________________________________

Ques12. What are the suggestions that you can give to counter those problems?\ a. ______________________________________________ b. ______________________________________________

Rate Nice Exports Ltd (CR Division) in terms of following parameters: (Give rating from 1-5) 1 = Poor & 5 = Excellent

f. Company image g. Delivery h. Conformance with specifications i. After sales services j. Response time k. Accommodation of urgencies

Date:

(Signature)